Consumer TechConsumer technology is going to exist indefinitely, perhaps for as long as the human species exists. At CleanTechnica, we try to feature consumer technologies that help to reduce global warming pollution and other types of pollution. For example: electric cars, solar panels, bikes, energy efficient appliances and electronics, and green smartphone apps. Keep an eye on this category for all sorts of fun and cool, helpful consumer technology.

In the long run, the cost of solar keeps falling, whereas the cost of natural gas electricity is likely at its historical minimum, especially as demand keeps rising for use of natural gas in other sectors without ready alternatives, like building heat.

Solar Wins on Predictability

The low recent price of natural gas has made it easy for short-sighted regulators to argue natural gas power will be cheap in the long run, but history suggests that volatile, not inexpensive, is the proper adjective. The following chart from the Rocky Mountain Institute shows the price history and widely varying price forecasts for natural gas over the past two decades.

This winter is a perfect illustration. Natural gas inventories are dropping to their lowest levels in a decade due to the persistent cold, as home and business heating race ahead of normal levels. The laws of supply and demand are likely to cause a jump in gas prices, or as energy expert Robert Rapier notes:

I expect it will garner some attention if we drop below 1 tcf [of natural gas inventories] next week since it hasn’t happened in over a decade. This would put the US about one more cold snap from sending natural gas prices to the moon.

It’s the major drawback in relying on gas for electricity generation especially when the alternative – solar power – offers a guaranteed fixed price for decades.

Solar Wins on Reliability

Because energy from solar is typically interconnected at the low-voltage, distribution level of the electric grid, the solar energy can provide key support services, such as maintaining the constant grid voltage level. Distant gas (or other) power plants can’t provide this service, which is only technically feasible close to load. The winning solar proposal in Minnesota will place 100 MW of solar in 2-10 MW discrete projects at existing utility substations, able to provide power and grid support where it’s needed.

Solar Wins on Infrastructure

One reason solar won in Minnesota is that the submitted costs for competing natural gas power plants didn’t include the projected cost of grid upgrades, such as new transmission lines, needed to deliver power to customers. Because the distributed solar projects will be sited at existing utility substations, they won’t require new infrastructure. (Minnesota’s recently completed value of solar methodology illustrates the financial value to utilities of avoiding new infrastructure). Just like the price certainty of solar electricity, avoiding potential pitfalls with expensive, new electrical infrastructure upgrades gives the nod to distributed solar projects.

It’s not just infrastructure on the electricity system to consider. Building a new natural gas power plant means new gas infrastructure to fuel it. But by 2050, Minnesota utilities need to significantly reduce their reliance on carbon-based fuels to meet the state’s 80% greenhouse gas emission reduction target. Utilities will be stranding ratepayer investments if they build new gas plants and pipelines – with a 50-year useful life – that will have to be retired in the next 35 years.

Solar Wins on Economic Benefits

Every megawatt of solar generates approximately a quarter million dollars in economic activity and eight jobs, compared to about 1 job per megawatt from natural gas. The proposed 100 MW solar project, if installed in 2015, would create an estimated 2,331 jobs and $260 million in economic activity, according to NREL’s JEDI economic model.

The comparison is almost meaningless, however, since Xcel’s competing natural gas projects were planned for North Dakota, not Minnesota. Not only is solar a better investment per megawatt, it’s a local resource that keeps Minnesota ratepayer dollars in Minnesota.

Every community can make the same calculation. Palo Alto, for example, gets its low cost solar energy and keeps the economic benefits close, too. The contracted solar projects are within a two-hour drive of the city’s electric customers.

Though not the case with the proposed Minnesota projects, distributed solar can double down the economic opportunity with local ownership. Community-based solar installations, such as the one at the Wright-Hennepin cooperative near Minneapolis, or those crowd financed by companies like Mosaic (see our recent interview with president Billy Parish), mean that not just the construction cost but the solar revenue will stay local.

The law judge’s ruling applies to a single case of solar v. gas, but the economics of solar continue to improve relative to natural gas. It’s likely that the victory of solar over gas in Minnesota is a New Year’s resolution that will stick.

About the Author

John Farrell directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.
Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.
John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

granted,my northern midwest geography may not be the most accurate,but who else finds it remarkable that the state immediately east of Minnesota,wisconsin,obviously must get much less insolation than Minnesota,since wisconsin seems to be investing so much less in solar.Funny thing that.

Bob_Wallace

Samie-same

Zone 5 – 4.2 average solar hours per day

Nealicus

John, great research and presentation. These are all arguments worth considering and your attention to the fact that this is happening in Minnesota is well taken!

Old Wishbone

Reason 7

Just a small one, clean air!

Will E

reason 6

Solar is WAR proof.

any gas plant will be bombed in war situation
any nuclear plant will be bombed in war situation, double effect.

solar cannot be bombed in war time.
nuclear utilities first hit in wartime. double effect.

nuclear utilities is like building bombs for any enemy.

Doug Cutler

I would say war resistant but point taken. I believe the US Military even has some thinking along the same lines.

Corbin Holland

Is it really war proof? Or is it just last on the targets of the enemy? A bunch of scattered solar installations would be harder than a centralized point of generation. I think a war that you are thinking of is one of the past. If someone tried to invade us like Russia to Ukraine, the last thing they would take out is a solar installation that provides less than 1% of a generation mix. In a war of the future between two heavily industrialized countries EMPs will take out the entire grid.

Wind Energy

Search the IM Network

The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by, and do not necessarily represent the views of Sustainable Enterprises Media, Inc., its owners, sponsors, affiliates, or subsidiaries.